The TV landscape has evolved significantly over the last 10 years, with innovations such as smart TVs and brands like Netflix or Amazon Prime driving radical changes in viewing habits. The precipitous rise of streaming services, along with increasing rates of cancellations for cable subscriptions means there are now more US households reachable via streaming devices than traditional ones.
And this is not only a US phenomenon, markets all over the globe are following similar patterns. In APAC, it is estimated that more than 400 million people now use OTT streaming services, with Singapore and Indonesia leading the way.
While adoption of CTV is lagging slightly behind the US, streaming on mobile devices is higher in Asia than anywhere else in the world, suggesting that the market is poised for massive growth as consumers continue to abandon traditional TV in favour of online streaming services.
So how can advertisers respond? Forward-thinking advertisers have already started testing Connected TV (CTV) as a means to reach their users, either alongside an existing linear TV strategy, or as a standalone channel.
In the latest how-to guide from Adjust, the ins and outs of CTV’s complex ecosystem is laid out and broken down, with practical tips on how to get started.
The CTV ecosystem explained
With over 82% of US households having at least one internet connected TV, it’s no surprise that 60% of marketers are shifting ad dollars from linear to CTV and OTT. As a result, the CTV market is predicted to grow to USD $19 billion by the end of 2024. With all of this in mind, it makes sense to start developing a CTV advertising strategy now, but as with all new marketing channels, the ecosystem and the different players within it can be a little confusing at first. Adjust and DCMN’s how-to guide breaks the ecosystem down into three main components - device, platform and apps.
Examples of CTV devices include smart TVs and devices that can plug into a TV to display video content - like game consoles and streaming devices. Let’s take Roku as an example: the Roku stick is plugged into the back of a TV, providing a connection to the internet.
The second piece is the platform, like Roku OS, an operating system developed specifically for streaming TV, which is also the software that powers all Roku streaming devices. There are ad placements in this interface available via direct deals with Roku.
The third part of the ecosystem is the apps themselves - and predominantly streaming apps including Netflix, Amazon Prime and Disney+. However, there are many apps coming from other verticals too, particularly gaming, which is the second largest category on Amazon Fire TV and Apple TV. To put this into perspective, on Roku OS alone, there are more than 23,000 apps. Many of the apps offer the ability to show ads (ad inventory) available via their SSP or network. Advertisers can access this programmatically via their DSP or by working directly with ad networks.
You can purchase ad space within the CTV ecosystem in a variety of ways such as buying programmatically and working with a DSP, working directly with a platform such as Roku or Samsung or working directly with CTV apps or publishers. These methods all come with their own benefits and limitations and the one you choose depends completely on your business, resources and goals.
Once you’re up and running, you’ll be able to take advantage of an ad format that feels like the familiar TV ad - an in-stream, pre-roll ad of 15-30 seconds in length, appearing before or in the middle of a piece of streamed content, but with the new and exciting opportunities offered by CTV.
Essentially CTV ad formats have the potential to combine the best of two worlds: the visual and messaging potential of TV and the interactive potential of digital advertising. And consumers are responding to these engaging ads, with a study showing that 82% of DTC shoppers will take action after seeing a CTV ad.